Lecture Marketing channel strategy: Chapter 2 - TS. Đinh Tiến Minh

1/12/2018<br /> <br /> Chapter 2: End-User Analysis:<br /> Segmenting and Targeting<br /> DINH Tien Minh<br /> <br /> • LEARNING OBJECTIVES<br /> – Understand the central role played by end-users and their<br /> demands in the design of marketing channels.<br /> – Define “service outputs” and identify and analyze them.<br /> – Recognize how to divide a market into channel segments for the<br /> purposes of marketing channel design or modification.<br /> – Understand how to target channel segments to optimize sales<br /> and profits.<br /> – Evaluate when and whether to try to meet all expressed service<br /> output demands in the short run in a particular market.<br /> – Describe the relationship between service output demands and<br /> solutions to overall channel design problems.<br /> <br /> END-USER SEGMENTATION CRITERIA:<br /> SERVICE OUTPUTS<br /> • These service outputs in turn can be classified<br /> into six general categories:<br /> – Bulk breaking<br /> – Spatial convenience<br /> – Waiting or delivery time<br /> – Product variety<br /> – Customer service<br /> – Information sharing<br /> <br /> 1<br /> <br /> 1/12/2018<br /> <br /> Bulk Breaking<br /> • Bulk breaking refers to the end-user’s ability<br /> to buy a desired (possibly small) number of<br /> units, even if the product or service originally’<br /> was produced in large, batch-production lot<br /> sizes.<br /> • When the channel system allows end-users to<br /> buy’ in small lots, purchases more easily<br /> support consumption, reducing the need for<br /> end-users to carry unnecessary inventory.<br /> <br /> Spatial Convenience<br /> • Spatial convenience provided by market<br /> decentralization in wholesale and/or retail<br /> outlets increases consumers’ satisfaction by<br /> reducing transportation requirements and<br /> search costs.<br /> • Business buyers value spatial convenience too<br /> <br /> Waiting Time<br /> • Waiting time is the time that the end-user<br /> must wait between ordering and receiving the<br /> goods or postsales service.<br /> • The longer the waiting time, the more<br /> inconvenient it is for the end-user, who must<br /> plan or predict consumption levels far in<br /> advance.<br /> <br /> 2<br /> <br /> 1/12/2018<br /> <br /> Product Variety and Assortment<br /> • Variety describes generically different classes<br /> of goods that constitute the product offering,<br /> namely, the breadth of product lines.<br /> • Assortment refers to the depth of product<br /> brands or models offered within each generic<br /> product category.<br /> <br /> Customer Service<br /> • Customer service refers to all aspects of<br /> easing the shopping and purchase process for<br /> end-users as they interact with commercial<br /> suppliers (for business-to-business purchases)<br /> or retailers (for business-to-consumer<br /> purchases).<br /> <br /> Information Sharing<br /> • Information sharing refers to education<br /> provided to end-users about product<br /> attributes or usage capabilities, as well as preand postpurchase services.<br /> • For some manufacturers and retailers,<br /> information sharing has been classified as<br /> solutions retailing.<br /> <br /> 3<br /> <br /> 1/12/2018<br /> <br /> Price<br /> • Price has not been listed as a service output.<br /> • Price is what the customer pays to consume<br /> the bundle of product + service outputs; it is<br /> not a service that gets consumed itself.<br /> <br /> SEGMENTING END-USERS BY SERVICE<br /> OUTPUTS<br /> • Different groups of end-users value service<br /> outputs differently.<br /> • We must consider how to group end-users<br /> according to their service output needs, by<br /> segmenting the market into groups of endusers who differ not in the product(s) they<br /> want to buy, but in how they want to buy.<br /> <br /> • There are three general steps to segmenting<br /> end-users by service outputs.<br /> – First, it is essential to generate a comprehensive<br /> list of all the potential service outputs desired by<br /> each end-user for the products being offered.<br /> <br /> 4<br /> <br /> 1/12/2018<br /> <br /> – Second,<br /> • The market might be divided into a priori segments (e.g.,<br /> those often used in product or advertising decisions), then<br /> analyzed to see whether those segments share common<br /> purchasing preferences.<br /> • Research might be designed and conducted to define<br /> channel segments that best describe end-users’ service<br /> output needs and purchasing patterns.<br /> – Channel segmentation should be designed to produce groups of<br /> buyers who<br /> » (1) are maximally similar within a group<br /> » (2) are maximally different between groups<br /> » (3) differ on dimensions that matter for building a<br /> distribution system.<br /> <br /> – Third, channel manager should name each<br /> segment to capture its identifying characteristics.<br /> • Naming each segment facilitates internal<br /> communication and organizational alignment, which is<br /> helpful in executing an effective channel strategy<br /> <br /> Service output<br /> <br /> A<br /> <br /> B<br /> <br /> C<br /> <br /> D<br /> <br /> References and credentials<br /> <br /> 5<br /> <br /> 4<br /> <br /> 6<br /> <br /> 25<br /> <br /> Financial Stability and longevity<br /> <br /> 4<br /> <br /> 4<br /> <br /> 5<br /> <br /> 16<br /> <br /> Product demonstrations and trials<br /> <br /> 11<br /> <br /> 10<br /> <br /> 8<br /> <br /> 20<br /> <br /> Proactive advice and consulting<br /> <br /> 10<br /> <br /> 9<br /> <br /> 8<br /> <br /> 10<br /> <br /> Responsive assistance during<br /> decision process<br /> <br /> 14<br /> <br /> 9<br /> <br /> 10<br /> <br /> 6<br /> <br /> One-stop solution<br /> <br /> 4<br /> <br /> 1<br /> <br /> 18<br /> <br /> 3<br /> <br /> Lowest price<br /> <br /> 32<br /> <br /> 8<br /> <br /> 8<br /> <br /> 6<br /> <br /> Installation and training support<br /> <br /> 10<br /> <br /> 15<br /> <br /> 12<br /> <br /> 10<br /> <br /> Responsive problem solving after<br /> sales<br /> <br /> 8<br /> <br /> 29<br /> <br /> 10<br /> <br /> 3<br /> <br /> Ongoing relationship with supplier<br /> <br /> 1<br /> <br /> 11<br /> <br /> 15<br /> <br /> 1<br /> <br /> Total<br /> <br /> 100<br /> <br /> 100<br /> <br /> 100<br /> <br /> 100<br /> <br /> % Respondents<br /> <br /> 16%<br /> <br /> 13%<br /> <br /> 61%<br /> <br /> 10%<br /> <br /> 5<br /> <br />